In a presentation called “Alternative Energy: Does Solar + Wind = Hot Air?” Chanos joked he would “upset the greenies,” by arguing that while there’s a lot of enthusiasm about green energy, the companies in the sector today don’t yet solve those problems.

Wind and solar are “not capable” of real cost-effective ways of meeting energy demands, he says. “Wind and solar are not efficient.”

As for job growth, he says that the boom of green jobs could be overblown, as most of the jobs generated are construction jobs, not in technology. “Put your hand on your wallet,” he says, as many of the green jobs are merely putting people back to work who were employed in housing.

He says he’s short Vestas Wind Systems, which trades in Denmark. “It’s been a darling until recently,” he says. The stock has been going down “and we think it has a lot further to go.” Vestas as changed its accounting and auditors, Chanos says, which is why he originally got interested in it. It has “arguably questionable accounting.”

Vestas said it didn’t change its auditors, but did change its accounting policies last year. Auditor PricewaterhouseCoopers signed off on the company’s 2010 annual report. In the 2009 report, both PwC and KPMG were listed as Vestas auditors.

Vestas declined to comment on any short position in the company.

Chanos also says he’s also shorting solar companies, including First Solar, citing a deterioration in quality control and operational problems, including balance sheet deterioration and negative cash flows.

A spokesman at First Solar had no immediate comment.

What has Chanos and his associates “most intrigued,” he says is the management exodus at First Solar. “When they start leaving, we feel most comfortable at all.” In recent years, managers have come in with no industry experience, Chanos says, and unloaded their holdings. “They’re seeing some of the things we’re seeing.”

And Chanos – who has said investor enthusiasm about China is waay overblown — joked he’s so negative on the country’s investment prospects, he won’t even eat Chinese food anymore. More Kung Pao Chicken for the rest of us.

It is a proven fact that the world's supplies of fossil fuels are declining. And it is good to see that governments and energy companies are concerned with finding alternative sources to the provision of energy to household, commerce and industry. But the alternatives have to be viable: both technologically and economically. And the more the people become informed and the more the people support this movement, the more the alternatives become economical and easy to produce. Let's go and prove to the sceptics that solar power is here, it will stay, and it will definitely outlast these hydrocarbon fuel supplies we currently rely on. http://www.focus-materials.com will have resources for learning about viable alternatives.

9:24 pm June 4, 2011

Finance Guy wrote :

A lot of you guys are missing the point: the industry sucks from a market perspective. Polysilicon prices plummeted and are expected to hit $40-45/kg by the end of the year. This has resulted in a tenfold increase in the number of firms producing solar wafers. The German and Italian subsidies resulted in a glut of projects (and firms like FSLR and STP) getting large farms installed. The result of this was a rush by the firms Chanos is deriding to build out capacity for future projects.

The result? Now there are plenty of silicon producers, some of which are forwardly integrated into installations, flooding the market with product and installers buying these cells to prepare for project contracts that just aren't there. Total installations were about 18GW in 2010. 2011 is only projected to be 20-22GW, a far cry from the 50%+ growth seen over the past few years, a direct result of lowered subsidies and less new buyers.

It isn't a question of whether or not solar energy is needed, or if it is useful. The reality is the market is flooded with producers and installers and not enough buyers, because the product IS TOO EXPENSIVE without significant subsidies. The biggest players are trading at 6-7x because the market isn't sure which of these firms, if any, are going to come out on top.

FSLR, the largest player, uses cheaper but far less efficient CdTe tech and will be completely pushed out of the industry once the cost of the silicon modules come down unless it buys up some of the smaller firms (JASO/TSL) who make the more efficient polysilicon solar products.

Most of these stocks are down 25%+ over the last few months. Invest at your own risk.

4:39 pm June 2, 2011

M Greenlee wrote :

Nice links to that focus-materials.com website.
With the technology in this field improving the way it has been, I don't see why buildings couldn't be producing most, if not all, of their own energy when utilizing systems like that.

4:16 pm June 2, 2011

Jude S. wrote :

In recent years, we have seen the improved quality and incredible increase of applications of BiPV. It is the measure of acceptance by the building industry to seriously achieve net zero that would make the greatest impact on the use. http://www.focus-materials.com has applications for retrofit and new construction.

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